Complete the setup tasks in the E-Business Suite applications that E-Business Tax uses for tax-related processes. These setup tasks include:

Legal Entities and Establishments – Set up legal entities and establishments to represent the first parties and tax authorities involved in your tax transactions.

Lookup Codes – Set up lookup codes for E-Business Tax lookup types.

Inventory Item Category Sets and Categories – Set up Inventory item categories for the items involved in your tax transactions. You associate Inventory item categories with product fiscal classifications to use in tax determination.

TCA Party Class Categories and Codes – Set up TCA classifications to create tax-related categories to classify third parties for tax purposes.

Tax Zones – Set up tax zones to group together geographical regions that share the same tax requirement.

Tax Configuration

Complete the E-Business Tax setup tasks to create a basic tax configuration for each of your tax regimes. A basic tax configuration contains the data applicable to the taxes belonging to a tax regime.

The tax configuration setup tasks are:

Tax Authority Party Tax Profiles – Set up a party tax profile for each tax authority involved in your transaction taxes.

Tax Regimes – Set up tax regimes in each country and geographical region where you do business and where a separate tax applies.

First Party Legal Entity Party Tax Profiles – Set up a party tax profile for each first party legal entity involved in your transaction taxes. When you first set up the party tax profile, set up configuration options for the tax regimes associated with the party.

Configuration Options – Set up configuration options to associate tax regimes with first parties.

Service Subscriptions and Exclusions – Where applicable, set up service subscriptions and service exclusions to use the tax services of external service providers for tax calculation.

Taxes – Set up a record for each of the taxes belonging to a tax regime.

Tax Reporting Codes – Set up tax reporting types and tax reporting codes to capture additional tax information on transactions for your tax reports, and apply them to the entities that you want to report on for each tax.

Where applicable, add tax reporting codes for the tax.

Tax Status – Set up the tax statuses for each tax.

Tax Jurisdictions – Set up tax jurisdictions for each tax to identify the geographical locations where the tax authority levies the tax.

Tax Recovery Rates – Set up tax recovery rates for each tax for full or partial recovery of taxes on transactions.

Complete the E-Business Tax setup tasks for fiscal classifications, if you intend to use fiscal classifications in the creation of tax rules for tax determination. Complete each setup task that applies.

Oracle Inventory – Set up Inventory-based product fiscal classification types using Oracle Inventory category sets. The product fiscal classification is defaulted on the transaction line for any item that belongs to the inventory category set.

Product Classification – Set up product fiscal classifications against an Inventory category set.

Product Intended use – Set up product intended use fiscal classifications against an Inventory category set when the intended use of the Inventory item is a factor either in tax determination or the tax recovery rate.

Non-Inventory – Set up non-Inventory-based product fiscal classification types using the E-Business Tax product category. You use the E-Business Tax product category if you do not use Oracle Inventory and for other special product classification needs.

Product Classification – Set up product fiscal classifications using the E-Business Tax product category. You can enter these product fiscal classification codes on a transaction line irrespective of the item.

Product Intended Use – Set up product intended use fiscal classifications using the E-Business Tax product category when the intended use of the product fiscal classification is a factor either in tax determination or the tax recovery rate.

Party Classification – Set up party fiscal classifications for your customers and customer sites and suppliers and supplier sites. You can also use the legal classification tax usage of legal activity codes according to your tax determination and tax reporting requirements.

Where applicable, set up configuration owner tax options for a combination of configuration owner and application event class.

Application Tax Options

Set up application tax options to update migrated tax setup or to create new tax setup based on the Release 11i defaulting hierarchy model. The defaulting hierarchy model defaults tax classification codes to transactions.

Note: You must complete additional setup tasks to use migrated tax data on transactions with E-Business Tax.

Make Tax Available on Transactions

After you complete your tax setup and verify that the tax setup behaves according to your requirements, you can enable each tax in the tax regime. Enabling a tax makes it available for use on transactions.

Simulate Transactions

After you complete your setup tasks, use the Tax Simulator to test the details of your tax configuration.

Using the Tax Configuration Region

After you complete tax setups, you can use the Tax Configuration region to display tax configuration data by country or by tax regime.